Is there anyone in telecommunications who has not jumped on the iPad bandwagon? The uptake of this new electronic device has been breathtaking. When reporting it fiscal 2010 fourth-quarter earnings last month, Apple announced it sold 4.19 million iPads during the three-month ramp-up to the holiday season. That followed third-quarter sales of 3.27 million units, right after the company began selling iPads.
And video providers haven’t wasted any time in capitalizing on the iPad’s capabilities. At the Cable Show in Los Angeles in June 2010, just weeks after the iPad’s launch, Comcast CEO Brian Roberts demonstrated an application that used the iPad as a remote control for browsing and selecting cable-TV programs.
It took just seven months from Roberts’ demonstration for Comcast actually to roll out the Xfinity remote-control app for the iPad to its customers. Seven months is incredibly fast, considering that existing cable-TV remote-control technology had not been upgraded substantially for decades.
Sean Brown, senior director/advanced applications engineering at Comcast Interactive Media, says people frequently ask him how his group was able to develop this app so quickly. According to Brown, a lot of behind-the-scenes work had been going on for the five years since the Comcast Interactive Media group was formed to build in-house expertise in Web technologies.
"We were basically benefiting greatly from a lot of prep working going on for many years," Brown says. Speaking at the Web 2.0 Conference in San Francisco in November 2010, Comcast Cable President Neil Smit said, "We’ve always been trapped inside the cable boxes. I think that’s really limited our ability to innovate quickly. This (the iPad) is improving our ability to innovate with apps. We’re now able to go at Web-like speed."
How It Works
The Xfinity remote-control app works on the iPhone and the iTouch as well as on the iPad, with Comcast saying last month it would work on Android and Blackberry devices "very soon."
The Xfinity remote control app actually involves two applications, explains Brown. First, there’s the app consumers download from iTunes that "has all the UI and GUI (the interfaces) that pull down metadata and let’s you control your box. It let’s you spin through the grid and rapidly search by typing in part of the name," he says. "That’s the app that everyone pays attention to."
In order for it all to work within Comcast’s video ecosystem, there’s also a companion Enhanced TV Binary Interchange Format (EBIF) app that works with EBIF-enabled set-top boxes. Comments Comcast spokesman Charlie Douglas, "Today (the Xfinity remote control app) works on a vast majority of Motorola boxes, and a number of Pace boxes. Our goal is to get it to work on as many set-tops as possible."
As far as how many subscribers have downloaded the app, Douglas would not release hard numbers, just saying, "It’s a healthy number, a good proportion of our customers. We’re pretty pleased with the metrics."
Comcast has plans to extend the features of its iPad app to include social networking and the ability to watch content anywhere — not just inside the subscriber’s home. This functionality, which will be branded "Play Now," will function as a second screen for users. Much like XfinityTV.com, Play Now will allow users to watch one thing on their TV screens while streaming something different on their iPads.
What About DRM?
But the “Play Now” functionality could run into some digital rights management (DRM) issues when people take their iPads on the road.
Smith Micro Software provides streaming technology to mobile operators and MSOs. Brian Sathianathan, director of video product line at Smith Micro, says:
"We see a lot of growth, working with North American MSOs. Many users have iPads and can connect on Wi-Fi and 3G." But there are content restrictions depending on whether video is broadcast over the cable plant, streamed over Wi-Fi or 3G, or streamed over broadband.
"MSOs already have existing rights to stream video on top of broadband, but don’t (necessarily) have rights to stream over 3G. They have the right to broadcast the same content over Wi-Fi and can deliver to the home, so they’re taking advantage of these two rights, putting an app on the iPad.
"We are seeing ‘node-locking,’" he adds, a concept that allows the end-user to watch all of a service provider’s content in their own homes, but not outside of their homes. "The way the market is evolving, this is an incremental step. MSOs know that going back and re-negotiating rights is a huge problem – there is no increased monetization. (But) they can broadcast content to the home, and take advantage of media they already have rights in – broadband and cable. The first thing is to leverage existing rights."
Once operators begin to track eyeballs more accurately via the iPad app, they will be able to use that momentum to work out new deals with content owners, suggests Sathianathan.
Although Comcast Cable’s Smit says the iPad gives the company some freedom to innovate away from set-top boxes, as it stands right now, the Xfinity remote-control app does work in tandem with a subscriber’s set-top box via an internal EBIF app. Even though subscribers can search for channels from a location outside their homes, they only can select and watch the programs from their home-based, set-top-box-connected TVs. (Note: Of course, they could log onto Xfinity.com and watch the shows available on Comcast’s TV Everywhere offering).
Time Warner Cable (TWC) is developing an iPad remote-control app that won’t rely on EBIF. Rather, it will send a signal to the iPad from servers on its network. In videos posted on Time Warner Cable’s blog in August 2010, CTO Mike LaJoie said, "Now that we’ve written this (app) for the iPad, it’ll work on the iPhone or iPod or on a Mac, and it’s a relatively short haul to make it work on a PC or a Sony PlayStation. The ability to innovate on these third-party devices is much more robust than what we can do with our legacy infrastructure."
But TWC’s app still must find the subscriber’s set-top box. "To tune the channel from this device, it has to send information over the network, and send that channel tune to the set-top box," LaJoie continued. "It leverages a number of other technologies that are coming to bear that really accommodate home networking and the ability for devices to discover each other very easily. A lot of these devices we’re looking at now support the Digital Living Network Alliance (DLNA), although the iPad doesn’t support DLNA."
New research from Strategy Analytics reiterates that, in the space of a few short months, Apple’s iPad has achieved the status of iconic device in the world of connected digital media, sparking a new industry of tablet-tailored applications and services as well as a fast growing portfolio of competing devices.
A recent survey conducted by the firm found that Apple’s competitors "may be playing catch-up in the tablet market but they should take encouragement from the fact that many consumers remain supporters of other leading technology brands such as Samsung, Sony, Blackberry and Motorola." Some two-thirds of potential iPad buyers want to spend less than $500 for a tablet device, leaving the door open for other manufacturers who can come in at a lower price point.
In October 2010, Ericsson debuted a new iteration of its IPTV Remote that incorporates touchscreen technology. According to Ericsson research, the use of new touchscreen devices matches consumer desire to “more flexibly interact with content in their homes.” In addition to its remote-control capability, the IPTV Remote can be used as a secondary TV screen, and it also can function as a portable TV in a Wi-Fi-enabled home. Case in point: While one person is browsing, other viewers in the home can watch the main TV screen and their selected program is undisturbed.
"The cool thing here is that the tablet has kind of unlocked all this potential, but it’s nothing more than a little computer," says Michael Adams, VP/software strategy at Ericsson Television. "The stuff that makes this all possible is back in the network. That was created as part of the video-on-demand (VOD) deployment and is now being extended."
Ericsson’s IPTV Remote with touchscreen technology is designed for operators to purchase and deploy the devices to their subscribers. Adams explains the two business models in the marketplace. In the first model, the customer already has the iPad or other device and downloads an app. With that model, the operator doesn’t have to spend capital, but also doesn’t have as much control. Additionally, it’s contingent on the subscriber purchasing a fairly expensive device, costing hundreds of dollars.
"The application environment on the IPTV Remote is managed by the operator," comments Adams. "There are no viruses, and it’s always going to have the same home screen and the branding that the operator wants to present." Ericsson’s device uses Telco TR 069 remote-management standards that allow the operator to be notified if the device fails.
Adams also mentions the issue of video security: "Content providers insist on protection of the content as it streams over the portable device. If it’s premium content, it can’t go in the clear; you need DRM software. With the Android-based device we’ve been showing, we can provide a complete solution that is very difficult to break. When you have an app on an iPad, it’s more difficult (to secure content); the native player on it doesn’t support DRM. Only iTunes can encrypt content for that device."
Another company, Technicolor, also has created a touchscreen tablet aimed at operators. In October 2010, Technicolor launched the second generation of its Media Touch tablet to act as an advanced remote control for set-top boxes, to access the Web and to interact with other equipment in the home.
Benoit Joly, VP/digital home marketing at Technicolor, re-iterates some of the same arguments as does Ericsson for an operator-deployed tablet. "They (operators) don’t control services on the iPad," says Joly. "Service providers want to have a stronger footprint in the home."
Two operators — China Telecom in China and PCCW in Hong Kong — have launched Technicolor’s Media Touch technology under their own brands for providing video communication including VoD and live TV, remote control, energy management and other services. According to Benoit, the business model for these operators is similar to cellphone business models where the tablet device is subsidized by the subscription: The longer a customer subscribes, the less he or she pays for the tablet.
As mentioned earlier, there’s virtually no player in the video-provider universe (or at least in the United States) that isn’t working on some kind of iPad or tablet technology.
TiVo has announced an iPad app as a remote control and companion device for its “TiVo Premiere” service. Although the initial app is for retail customers, Jim Denney, VP and GM/product marketing at TiVo, says the plan is to evolve the app for use by video providers. TiVo supplies its boxes for RCN, Suddenlink and Virgin Media.
Verizon says it will provide an iPad app for FiOS subscribers sometime this year, adding the app will allow authenticated FiOS subs to view live content on their iPads, both inside and outside of their homes. As of August 2010, a Verizon spokesman said the company was in negotiations with content providers.
AT&T offers its AT&T U-verse Mobile App for iPhone at the Apple App Store. The app gives subs the ability to download and watch TV content, and to manage their DVRs remotely. However, the carrier hasn’t made any announcements yet about downloading the app to the iPad. Granted, with its IPTV infrastructure, the U-verse remote-control technology already has far more functionality than the antiquated remote controls of cable video providers.
Finally, last month, DISH Network announced its DISH Remote Access, a free application that gives DISH Network customers the ability to watch their live and recorded TV on an iPad if they have a broadband-connected, Sling-enabled device.
The Bottom Line
There’s every indication that those operators and vendors who haven’t already made an iPad announcement likely will do so at the Consumer Electronics Show (CES) in early January.
Ironically, The Diffusion Group (TDG) has released research that finds a strong correlation between iPad use and the likelihood to downgrade or cancel pay-TV service.
According to the research firm, more than one-third of iPad owners (33.9 percent) are, to varying degrees, likely to cancel their pay-TV service in the next six months (as of November 2010), which is more than three times the rate among average adult broadband users (9.6 percent).
Says Michael Greeson, TDG’s founding partner and director of research, "Major broadcasters and cable networks will likely see this research as reason to restrict their online offerings in general (and iPad apps in particular) to low-value content so that viewers are motivated to maintain their pay-TV relations. On the other hand, content creators looking to go over the top will view this research more positively, as evidence that targeted efforts to expand iPad-centric content offerings will be rewarded with dramatically improved viewership."
Whatever impact the iPad might have to video providers, the genie is definitely out of the bottle on this one.
Linda Hardesty is associate editor at Communications Technology. Contact her at email@example.com.